San Diego (CNN)Twenty-five years ago, Paula Claussen's friend invited her to make the short trip from her home in San Diego, California, across the border to Tijuana, Mexico, to donate clothing to people in need.

Claussen didn't expect that day to change the course of her life.

The drive took less than an hour, but when they arrived at their destination -- a shantytown on the outskirts of Tijuana -- Claussen couldn't believe her eyes.

"I was shocked by the conditions that I saw down there," she said.

I was shocked by the conditions that I saw.

Paula Claussen

Families with young children were living in ramshackle homes: The dirt floors turned to mud when it rained. The walls had gaps, allowing tarantulas, rattlesnakes and rats to invade. Many roofs were merely old tarps with holes in them.

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There was no running water, no electricity and no sewage system.

"It was something that touched me very deeply," Claussen said.

So in 1991, she started Project Mercy. The nonprofit has constructed more than 1,250 free homes for people living in Tijuana's most desperate communities.

"It still horrifies me every time I see the way people are living and the obstacles they face on a daily basis. It's nothing I can get over," Claussen said. "All I can do is try to help them."

CNN's Laura Klairmont spoke with Claussen about her work. Below is an edited version of their conversation.

CNN Hero Paula Claussen and volunteers construct a home in one workday

CNN: You really just stumbled upon this problem. How did you go from seeing the issue to dedicating your life to helping?

Claussen: I was horrified to see the conditions people in these villages on the outskirts of Tijuana were living in. I saw the desperation in their eyes and yet they were so pleasant to us, and that really touched my heart. All of a sudden, a passion grew inside me to make a difference for these people in particular.

So I started going down there a lot to donate clothing and other items. One day I was helping a woman move things into her shack and was completely shocked to see the young woman's sick son sleeping on the dirt floor. I realized then that there was something these families needed more than anything else: stable homes.

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CNN Hero Paula Claussen: Changing lives in one day

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CNN Hero Paula Claussen: Changing lives in one day02:15

CNN: You and your team are able to build a home from start to finish in one day. What are the homes like?

Claussen: The homes are approximately 16 by 20 feet in size. They are constructed out of wooden frames and have a concrete slab floor. Each house has four windows and a solid door. The back part of the homes are divided into two rooms. Each home has a flight of stairs leading up to a loft area, where children tend to sleep.

They are constructed to be as secure as possible. We also build in a breaker box for people to access electricity safely inside their homes, if that's an option for them. We paint the homes bright colors. Families are also given carpets, mattresses and other necessities. Volunteers arrive at 8 a.m., and usually by 4 p.m. they are complete.

CNN: Your group engages people from both sides of the border to build the homes.

Claussen: What we're doing is bringing neighbors together that are living totally separate lives and giving them the opportunity to get to know each other better.

Volunteers from California come down to help build the houses. They work alongside the local community. They all come together, work together, and by the end of the day, they're all friends shaking hands, having bear hugs. It's a great feeling. They come away with a totally different perspective and with a totally different attitude towards the plight of these people who are their neighbors next door.

It creates a bond that people would not otherwise form. Many volunteers want to come back and visit the families they meet. That makes the work very special.

Claussen stands outside a Project Mercy home with the Cervantes family

CNN: What's it like to give a family the keys to their new home?

Claussen: They are in tears. The fear has gone out of their eyes and they are just in awe.

To see the joy and relief on their faces when they walk into their new home, it makes me very proud. It's a great feeling to witness how we are changing their lives in just one day.

I think an adequate shelter is a basic human need. Anyone that has a solid shelter over their head has a better chance of achieving a better life.